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Improved affordability, shrinking housing supply and growing public anxiety over homeownership are creating a complicated outlook for �鶹��ýӳ��’s housing market, according to speakers at a recent housing summit hosted by the Residential Construction Council of Ontario.

Industry experts told the audience while some key indicators are moving in the right direction, economic uncertainty continues to weigh heavily on consumers and developers alike, preventing a stronger rebound in housing activity.

Jason Mercer, chief market analyst at the Toronto Regional Real Estate Board, said the Greater Toronto Area resale market now exhibits many of the characteristics typically associated with a recovery, as lower borrowing costs and softer home prices have significantly improved affordability compared with the peak of the Bank of �鶹��ýӳ��’s interest-rate tightening cycle.

“Affordability is no longer the major obstacle it was during the peak of the interest-rate tightening cycle,” he said.

According to Mercer, the income required to purchase a $1-million home in the GTA has fallen dramatically and mortgage qualification costs have also eased substantially.

Yet despite those improvements, home sales remain well below levels that demographic trends would normally support.

Mercer said buyers are still exercising caution because confidence, rather than affordability, has become the market’s biggest obstacle.

Economic uncertainty, trade tensions with the United States and concerns about inflation and future interest-rate movements are causing many prospective purchasers to delay major financial decisions.

“If affordability were the only issue impacting demand, we would already be seeing a much larger portion of that pent-up demand come back into the marketplace,” Mercer said.

Many households that would typically be purchasing homes are remaining on the sidelines while waiting for greater certainty about the broader economy, he noted.

However, he said, inventory levels have begun to tighten after rising sharply over the past two years.

Looking ahead, he believes the ingredients for a stronger recovery are in place.

“If we start to see more clarity, if we start to see consumer confidence pick up, the preconditions are there to see homeownership transactions pick up and potentially pick up in a hurry as we move through 2027,” Mercer said. “But you know, the jury’s still out in terms of if that clarity will appear.”

While the resale market searches for momentum, Daniel Foch of Valery Real Estate Inc. said the pre-�鶹��ýӳ�� sector is beginning to show signs of renewed life, even as the future housing supply pipeline continues to shrink.

Foch described a Canadian housing market increasingly divided between highly affordable regions that continue to attract growth and major urban centres such as Toronto and Vancouver, where homeownership remains out of reach for many younger households.

“The markets that continue to grow and continue to attract new residents are the ones that remain affordable,” he said.

Faced with high ownership costs, a growing number of Canadians are choosing to rent not because they have no other option, but because they see stronger financial opportunities elsewhere.

“There are many people who are renters not by necessity but by choice,” Foch said. “They’re making a conscious economic decision not to own a home because the economics are far better for renting.”

Many high-income renters are using the gap between rental costs and ownership expenses to invest in businesses, equities and other assets instead of stretching themselves to purchase a home, he said.

At the same time, Foch warned affordability challenges and elevated financing costs are discouraging new housing �鶹��ýӳ��, particularly in the rental sector. Housing starts have slowed and fewer projects are moving forward as developers confront more challenging economics.

That slowdown could become a significant problem in future years.

“As prices have corrected, we’ve stopped seeing supply getting added to the market in a way that would trend us toward excess supply,” Foch said.

The decline in new project launches means supply is tightening just as long-term housing demand is expected to return. Foch argued today’s development slowdown could eventually recreate the same housing shortages policy-makers have spent years trying to address.

While Mercer and Foch focused on market fundamentals, David Coletto, founder, chair and CEO of Abacus Data, provided data to show how Canadians are feeling about housing and their future.

His research suggests housing remains one of the country’s most pressing concerns, particularly among younger generations who increasingly worry they may never achieve the security and stability their parents enjoyed.

“We’ve moved from asking, ‘Will there be enough?’ to asking, ‘Will we be OK?'” Coletto told the audience.

Roughly three in 10 Canadians still identify housing affordability and accessibility as one of the country’s most important issues.

According to Coletto, this uncertainty has contributed to what he described as a growing “precarity mindset,” where Canadians increasingly view instability as a permanent feature of modern life rather than a temporary challenge.

Research presented at the summit showed most Canadians believe the country’s housing system is failing to meet expectations, while dissatisfaction with government performance on housing remains widespread.

Coletto said many Canadians are delaying major life decisions, including moving, changing careers, starting families and retirement planning because of financial uncertainty.